Method for selling marine cargo insurance in a network environment

ABSTRACT

A storage media and method for transacting cargo insurance business in a network environment includes the on-line automation of quoting, billing, certificate issuance, underwriting, and claims processing. Moreover, the method also includes customer qualification and support services, in addition to data collection and analysis, for management report generation.

BACKGROUND OF THE INVENTION

[0001] The present invention relates to a method for transacting cargoinsurance business on-line. More specifically, the present inventionrelates to a method for automatically quoting, issuing, and supporting acargo insurance policy on the internet, as well as the processing ofinsurance claims from first notice of loss to settlement of claim.

[0002] For purposes of this application, “on-line” refers to anytransaction occurring on a network such as a LAN, WAN, Intranet, VPN(Virtual Private Network), etc, As an example, the network may be theInternet.

[0003] The cargo insurance business encompasses a wide variety ofinformation exchanges with prospective and active customers, as well asextensive support functions for the insuring process. In a preferredembodiment the customer uses a computer, PDA (personal digitalassistant), or other networking device to access the inventive system.As an example, this networking device may use existing web-browsersoftware to access a known URL corresponding to a website providing theinventive system.

[0004] For example, typical customer interfaces include:

[0005] Requesting quotes for open policies and individual shipmentinsurance;

[0006] Purchasing and payment of shipment insurance;

[0007] Issuing insurance certificates,

[0008] Voiding certificates;

[0009] Filing a claim;

[0010] Checking the status of a claim; and

[0011] Customer service.

[0012] These “front office” functions also require “back office” supportfunctions, including:

[0013] Data-feeding of customer data;

[0014] Performing pre-qualification of customers;

[0015] Underwriter referral capability;

[0016] Interfacing to accounting departments;

[0017] Quote calculation;

[0018] Decision to reinsure;

[0019] Reinsurance accounting;

[0020] Automated notification of various parties when a claim issubmitted against a certificate;

[0021] Subrogation process tracking; and

[0022] Claim adjustment.

[0023] Moreover, additional customer support functions can be provided,to assist the customer throughout the process. Examples of this type ofsupport function include:

[0024] Instructing the customer regarding claim documentation;

[0025] Instructing the customer when data inputted is invalid;

[0026] Providing the customer with a list of available surveyors whenthey report a loss; and

[0027] Providing the customer with information regarding his shipmentresponsibilities.

[0028] It is also desirable to generate management reports, such asprofitability with respect to commodity, customer region, etc., and alsoto have claims data reporting capability.

[0029] Furthermore, a cargo insurance system should have the ability toanalyze the data provided by customers to identify potential problemswith shipments or claims. This functionality can be used in thefollowing situations:

[0030] Evaluating claims to ensure that dates fall within the legalstatutory time limits; and

[0031] Red-flagging high-risk commodities and ports to ensure that losscontrol is able to take preventive measures against loss.

[0032] Therefore, an all-encompassing cargo insurance system shouldinclude both the underwriting and the claims processes. Importantly,this type of system can be automated, and can be made available on aninsurer's website or other point of entry. A fully automated on-linesystem of this type would have the features summarized below.

[0033] Underwriting Process

[0034] The underwriting process is composed of five major steps:

[0035] 1. Quote creation

[0036] 2. Billing

[0037] 3. Certificate issuance

[0038] 4. Reinsurance

[0039] 5. Loss Control

[0040] Quote Creation

[0041] a. The quote creation process is initiated when a user,preferably a business-to-business exchange, accesses the insurer'ssystem application, via a website or other point of entry, to inquireabout the insurer's cargo insurance rates. The system requires thatusers subscribe to the site before any quotes can be generated.Subscription takes place immediately, and only requires very minimalcustomer information, such as name, company name and email address. Whena user goes through the subscription process, any customer data that canbe downloaded from the exchange is downloaded. This data will then beused to minimize the amount of data entry required in the creation ofdocuments.

[0042] b. When the login process is completed, the system performs asmall pre-qualification check, where customer claims and premiumpayments records are accessed. The system will have the ability toreject some customers, based on data regarding past behavior that mayindicate a high rate of claims or unpaid premiums.

[0043] c. The quote creation process continues, with data input by theuser of information regarding commodity, departure and arrivallocations, mode of conveyance, estimated departure date, invoice value,amount insured and currency. Based on the transactional informationprovided by the user, or the business-to-business exchange, the systemperforms the quote calculation.

[0044] d. The customer can review the quote information provided by thesystem, and make data modifications while in the quote screen, to seewhether changes in the deductible amount or shipment locations canresult in a cheaper rate.

[0045] Billing

[0046] The billing process is initiated when a user accepts a quote thatwas provided by the system. The system captures all relevant paymentdetail information, but payment is not processed until the user agreeswith the terms of the insurance contract. If the billing process iscompleted successfully, the insurance certificate can be issued.

[0047] Certificate Issuance

[0048] The certificate issuance process starts with a systemverification of the data that was provided up to that point. If anyrequired data is missing, the user is asked to complete it. The user isthen asked to review the terms and conditions of the contract, as wellas the data inputted. The user can change any piece of data that doesnot affect the actual rate that was provided with the quote. If the userchanges one of these key fields, the system will have to redo the quotecalculation, and the user will receive a warning message. When all termsand conditions are accepted, the payment is processed, and an electroniccertificate of insurance is issued. A follow up hard copy of theinsurance certificate will be forwarded to the customer, if necessary.

[0049] Reinsurance

[0050] When the transaction amount is large, there may be a need for theinsurer to reinsure part of the certificate value. If this is the case,the system will automatically evaluate the percentage of reinsurancerequired, as well as the percentage allocated to each re-insurer.

[0051] Loss Control

[0052] The underwriting process ends with an evaluation by the system ofthe loss potential, based on commodity and port locations provided bythe customer. If there is a high loss potential for this particulartransaction, a loss control agent will be contacted by email.

[0053] Claims Process

[0054] A claim can follow two different basic flows, based on the lossamount reported by the user. While the regular process requires a periodof investigation and the creation of a reserve, a fast track claim maybe paid automatically by the insurer, after all required documentationhas been provided.

[0055] a. Once the user has completed a claim notification, the systeminitiates a series of automated actions:

[0056] 1. The user is provided with a list of documents that will berequired to process the claim.

[0057] 2. A series of notification emails are sent to the claimsrepresentative, the underwriter, loss control, and the recoverydepartment, based on such factors as amount of the claim, type of lossand statutory time limits.

[0058] 3. If there was reinsurance on the particular transaction, thevarious re-insurers are also contacted.

[0059] In the case of a fast track transaction, or when theinvestigation process has indicated that the claim is acceptable, theclaim is adjusted and paid. If the claim is for more than a certainamount, the file is sent to recovery.

[0060] Accordingly, it is an object of the present invention to define amethod for automating an on-line system for transacting cargo insurancebusiness, including all the features heretofore described.

SUMMARY OF THE INVENTION

[0061] In accordance with an illustrative embodiment of the presentinvention, a method for an insurer to automate the transaction of cargoinsurance business on-line comprises the steps of:

[0062] a) in response to a customer request on-line for insuring a cargoshipment, generating a cargo insurance policy quotation on-line;

[0063] b) upon acceptance of the cargo insurance policy quotation by thecustomer on-line, generating a bill on-line corresponding to the cargoinsurance policy quotation;

[0064] c) upon acceptance of the bill by the customer on-line, issuing acargo insurance certificate on-line to the customer;

[0065] d) determining a reinsurance portion of the value of the cargoinsurance certificate automatically; and

[0066] e) processing on-line any subsequent claim from the customerregarding the cargo shipment.

[0067] The disclosed method also includes pre-qualifying the customer,prior to generating the cargo insurance policy quotation, based on thecustomer's claim and payment history.

[0068] Moreover, the cargo insurance policy quotation can be modifiedon-line by the customer and the insurer, interactively.

[0069] Any subsequent claims from the customer regarding the cargoshipment are handled either through an investigative process, or can besettled directly.

[0070] Finally, various types of management reports can be generatedfrom the on-line data, including profitability, customer demographicsand claim history.

BRIEF DESCRIPTION OF THE DRAWINGS

[0071] The invention is described in greater detail below through theexample of embodiments in accordance with the present invention, asshown in the following drawings:

[0072]FIG. 1 shows a flow diagram of an insurance policy purchase;

[0073]FIG. 2 shows a flow diagram of a quote creation;

[0074]FIG. 3 shows a flow diagram of a billing process;

[0075]FIG. 4 shows a flow diagram of a certificate issuance;

[0076]FIG. 5 shows a flow diagram of risk evaluation;

[0077]FIG. 6 shows a flow diagram of a shipment data entry;

[0078]FIG. 7 shows a flow diagram of data validation;

[0079]FIG. 8 shows a flow diagram of reinsurance evaluation;

[0080]FIG. 9 shows a flow diagram of quote creation detail;

[0081]FIG. 10 shows a flow diagram of certificate voidance;

[0082]FIG. 11 shows a flow diagram of customer pre-qualification;

[0083]FIG. 12 shows a flow diagram of a claims process overview;

[0084]FIG. 13 shows a flow diagram of claims notification creation;

[0085]FIG. 14 shows a flow diagram of claims notification processing;

[0086]FIG. 15 shows a flow diagram of recovery/subrogation;

[0087]FIG. 16 shows a flow diagram of investigation/negotiation;

[0088]FIG. 17 shows a flow diagram of claim payment; and

[0089]FIG. 18 shows a flow diagram of claim acknowledgment.

DETAILED DESCRIPTION OF PREFERRED EMBODIMENTS OF THE INVENTION

[0090] The inventive method is described herein by means of a series offlow diagrams, which cover the following areas:

[0091] a. Individual Shipment Insurance Policy Purchase

[0092] b. Customer Pre-Qualification

[0093] c. Quote Creation

[0094] d. Billing

[0095] e. Insurance Certificate Issuance

[0096] f. Insurance Certificate Voidance

[0097] g. Risk and Reinsurance Evaluation

[0098] h. Shipment Detail Data Entry

[0099] i. Data Validation

[0100] j. Reinsurance

[0101] k. Premium Calculation

[0102] l. claims

[0103] m. PLA Creation

[0104] n. claims Notification to Underwriting, Loss Control, andRecovery

[0105] o. claim Acknowledgement

[0106] p. Recovery/Subrogation

[0107] q. claims Investigation/Negotiation

[0108] r. claim Payment

[0109] Each of the workflow processes has associated text, which islinked by the process number. In addition, numbered circle connectorsare used in the drawings to link one flowchart to another, and theletter designations in the drawings are defined as follows:

[0110] A=Action

[0111] D=Defined Procedure

[0112] S=System Data Input

[0113] O=Output

[0114] Doc=Document

[0115] Q=Question

[0116] P=Process

[0117] U=User Data Input

[0118] E=End

[0119] In one embodiment of the above-mentioned invention, the methodmay be implemented on software. The software may be run on a computer oron a server. Such computer may be connected to a server such as a LAN,WAN, Intranet, VPN, Internet, etc.

[0120] The text associated with each flow diagram describes how theprocess is performed, and includes the following information:

[0121] a. User interaction with the system, and any messages that may bedisplayed;

[0122] b. Information on the type of data gathered, and associatedsource(s);

[0123] c. Decision logic that may be involved in performing the process;

[0124] d. For quote calculation, the text includes the necessary datatype to be captured, and the rate formula needed for premiumcalculation; and

[0125] e. Other pre-defined workflows that may be called.

[0126]FIG. 1 shows a flow diagram for an individual shipment insurancepolicy purchase, including a symbol legend at the bottom of the drawing,which applies to the subsequent drawings as well. Table 1, below,provides a description for each numbered item in FIG. 1. TABLE 1 NumberDescription 1-A A B2B exchange member is led to the insurer's cargoinsurance product offering from the B2B exchange site. The user clickson “REQUEST NEW QUOTE’. 1-D1 The quote creation process is completed.[See Workflow 2 - FIG. 2] 1-D2 The billing process is completed. [SeeWorkflow 3 - FIG. 3] 1-D3 If the billing was successful, the usercompletes the remaining data entry requirements regarding the shipment.1-D4 The system completes the insurance certificate issuance process.[See Workflow 4 - FIG. 4] 1-D5 If there is reinsurance, the reinsuranceprocess is started. [See Workflow 8 - FIG. 8] 1-D7 The system makes anevaluation to determine whether the customer can be extended insurance,considering previous claims, premium payment history, and other relevantcriteria. [See Workflow 18 - FIG. 11] 1-E The transaction is complete.1-P1 As part of the user set up, the insurer will download the customerprofile directly from the B2B exchange. 1-P2 The user must enter a validlogin ID and password. Password recovery functionality is provided aspart of this service. 1-Q1 Checks whether the customer is logged in. Aspart of the requirements for using the system, all users have to beregistered. Proof of identity is provided via login. 1-Q2 New customerswill have to set up a user ID and password to access the website. 1-Q3If the customer pre-qualification is successful, the quote creationprocess starts. 1-Q4 The customer clicks on “PURCHASE INSURANCE BUTTON”to accept the quote. Customers with prior agreement to buy insurancewill skip this step. 1-Q5 This step checks whether the billing processwas successful. 1-Q6 Evaluates the need for reinsurance, based on therisk assessment of System Workflow 5, FIGS. 2 and 5. 1-D6 When thecustomer does not pre-qualify, or if there is a problem with the billingprocess, the user is referred to an underwriter.

[0127]FIG. 2 shows a flow diagram for a quote creation process, withcorresponding definitions as listed in Table 2, below. TABLE 2 1-E Ifthe risk is too high, and reinsurance is not available, the user isreferred to an underwriter, and the process is aborted. 2-D1 The data ischecked for content. [See Workflow 17 - FIG. 18] 2-D2 The riskevaluation process is performed. [See Workflow 5 - FIG. 5] 2-D3 Thequote is calculated and saved, so that it will be available the nexttime the user logs on to the system. [See Workflow 15 - FIG. 9] 2-D4 Theuser performs data entry of the required fields for a quote to becreated successfully. [See Workflow 6 - FIG. 6] 2-O1 The quoteinformation is displayed - along with suggestions as to how to make itlower or different, in “what-if” scenarios. The user is able to makemodifications on the spot. Results of changes in the fields result in anew quoted amount instantaneously. The value of the shipment is the onlyfield that cannot be modified. 2-O2 When the insurer can not provideinsurance for this shipment, a referral is provided to the user. 2-O3The quote information is displayed, along with suggestions as to how tomake it lower. The user is able to make modifications on the spot.Results of changes in the fields result in a new quoted amountinstantaneously. 2-Q1 Some B2B exchanges may provide the ability todownload relevant transaction information directly. This would be ashortcut for the user, who would not have to perform as much data entry.2-Q2 The user is asked whether he is the insured. 2-Q3 If the risk wasevaluated to be too high, the user is informed, and a referral is made.2-Q4 If the data is invalid or incomplete, the user returns to the datainput screen. 2-S1 When the transaction is not downloaded from theexchange, it is still possible for the user to populate the insurerparty information if the user is the insured party. 2-S2 The transactiondata is downloaded from the exchange.

[0128]FIG. 3 shows a flow diagram for a billing process, withcorresponding definitions as listed in Table 3, below. TABLE 3 3-O1 Theuser reviews the payment information entered. 3-P1 Payment method usedwill depend on the insured's country, as well as on the terms ofagreement with the B2B exchange. Several payment options could beoffered to the same customer. 3-P2 Payment is processed. 3-P3 If paymentwas not completed successfully, then the transaction is aborted. 3-Q1Inquires if the user will use an online or offline method of payment.3-Q2 The user is given the possibility to change the credit cardinformation, if it was not entered properly. 3-Q3 If payment issuccessfully completed, the billing process is complete. If not, theuser can modify the payment data that was previously entered. 3-Q4Inquires whether the user wishes to modify the payment informationpreviously entered. This can only take place if the payment wasunsuccessful. 3-Q5 Process payment manually. The user will be instructedto send payment to an address, or to make payment in person. Necessaryinformation and disclaimers will be provided. 3-U1 If online method ofpayment will be used, the user will enter the appropriate information.(This information could be kept on file, in which case this step wouldbe bypassed.]

[0129]FIG. 4 shows a flow diagram for issuing an insurance certificate,with corresponding definitions as listed in Table 4, below. TABLE 4 4-01The user receives a warning that not all information was provided. Themissing data is highlighted. 4-D1 The system verifies that the data isvalid and complete [Workflow 17 - FIG. 18] 4-D2 If the user decides tocomplete the data, the shipment detail data entry process starts. [SeeWorkflow 6 - FIG. 6] 4-DOC1 The certificate of insurance is printeddirectly by the user. Certificate to contain instructions on the use ofthe automated claims system, or an alternative filing method. 4-02 Theuser reviews the data entered so far, as well as the insurer's terms.4-P1 The system assigns a new insurance certificate number. [This couldbe a sequential number.] 4-P2 The insurance certificate is issued, andsent to the user electronically. 4-P3 The original certificate is mailedto the user, based on legal requirements. 4-Q1 This process may havealready been started. If this is the case, the certificate number isassigned. 4-Q2 If data is completed, the process continues; if not, theuser receives an error message, and data must be completed or correctedbefore the insurance certificate is issued. 4-Q4 If the user agrees withthe terms and signs, the insurance certificate is issued. If the userdoes not sign, the process ends.

[0130]FIG. 5 shows a flow diagram for evaluating risk, withcorresponding definitions as listed in Table 5, below. TABLE 5 5-P1Process outcome is risk is OK. 5-P2 Process outcome is risk is too high.5-P3 A re-insurer is selected, based on criteria and transaction data.5-Q1 Limits are checked. 5-Q1 If re-insurance is possible based on theseconditions, a re-insurer is identified, and the process continues. 5-Q2The commodity is checked against the list of restricted commodities.5-Q3 The from and to ports are checked against the list of restrictedports. 5-Q4 Additional rules as defined.

[0131]FIG. 6 shows a flow diagram for shipment detail data, withcorresponding definitions as listed in Table 6, below. TABLE 6 6-U1 Datais inputted 6-D1 Data is validated The system checks the data enteredagainst a specific list of rules. [Workflow 7 - FIG. 7] 6-Q1 If the datavalidation process is successful, the process ends. If it is notsuccessful, the user receives a warning message, and is asked to correctthe invalid data. [Invalid fields will be highlighted in red.] 6-O1 Anerror message is received by the user, along with the fields that mustbe corrected.

[0132]FIG. 7 shows a flow diagram for data validation, withcorresponding definitions as listed in Table 7, below. TABLE 7 7-P1 Ifthe validation fails, the user receives an error message, and invalidfields are highlighted in red. 7-Q1 Data types are checked (valid dates,number into numeric fields, etc.). 7-Q2 Dates are validated. [Shipmentdate later than today, not after X months from today's date, and need toaccommodate for time differences] 7-Q3 Other validation rules asdefined.

[0133]FIG. 8 shows a flow diagram for reinsurance, with correspondingdefinitions as listed in Table 8, below. TABLE 8 8-D1 Data is validated.[See Workflow 7 - FIG. 7] 8-01 When data entry is completed, the userreviews the data entered, and verifies the allocation amounts. 8-P1Accounting entries as defined. 8-P2 The details of the transaction areforwarded to the re-insurers. 8-Q1 There are two different data inputrequirements, depending on whether the risk allocation method is excessof loss, or quota. 8-Q2 If data is valid, the user can continue. If not,an error message is displayed, and the user must correct it beforecontinuing. 8-Q3 If the user is satisfied with the data entered, theprocess continues. If he or she needs to make modifications, it ispossible to do so before committing the changes to the database. 8-U1The underwriter identifies the risk allocation method. [Excess of loss,quota share] 8-U2 If the risk allocation method is quota, a percentageof the share can be allocated, or the allocation can be made using afixed amount. 8-U3 If the excess of loss method is used, the thresholdamount has to be entered. 8-U4 The user updates the data.

[0134]FIG. 9 shows a flow diagram for quote calculation, withcorresponding definitions as listed in Table 9, below. TABLE 9 15-P1 Thequote is calculated based on the following information: Value of thegoods; 15-P2 The type of commodity shipped; 15-P3 Advance percentagedetermined via table look up; 15-P4 Whether the goods are containerizedor not; and 15-P5 The shipment method and the region where the goods areshipped to and from. 15-P6 The rate is calculated based on the followingformula: Premium due = Amount insured * containerized factor * packagingfactor * commodity factor * ocean/air-region %. The final premium issubject to a minimum amount. The rate is saved so that it will beavailable in subsequent user sessions. NOTE: Rating formula can bemodified as required. 15-P7 The deductible that applies is taken fromthe tables that list the appropriate rate, according to the informationspecified above.

[0135]FIG. 10 shows a flow diagram for voiding a certificate, withcorresponding definitions as listed in Table 10, below. TABLE 10 16-AThe void certificate process takes place when the certificate has beenissued; the user needs a change in the terms. 16-E The process is ended.16-01 If there are outstanding or paid claims against this certificate,the certificate cannot be voided. The user is instructed that thecertificate cannot be voided. 16-P1 If a hard copy of the insurancecertificate was issued, the user must return it before the document canbe voided. 16-P2 If there are no outstanding hard copies, the status ofthe certificate is void or canceled. 16-P3 Necessary accounting entriesare completed to adjust accounts receivable or payable. 16-Q1 If thereare outstanding or paid claims against this certificate, the certificatecannot be voided.

[0136]FIG. 11 shows a flow diagram for customer pre-qualification, withcorresponding definitions as listed in Table 11, below. TABLE 11 18-Q1The customer pre-qualification process requires that the total ofprevious claims doesn't exceed a certain number or amount. 18-Q2 Thecustomer cannot have unpaid premiums exceeding a certain amount. 18-Q3If the customer's country of domicile has legal restrictions, or is onthe embargo list, the customer is not qualified. 18-Q4 Other criteriacan be added, as desired. 18-P1 The customer does not qualify. 18-P2 Thecustomer qualifies for requesting a quote.

[0137]FIG. 12 shows a flow diagram for the claims system overview, withcorresponding definitions as listed in Table 12, below. TABLE 12 12-D1The user completes a claims notice. Legal disclaimer needed to let thecustomer know that acknowledgement of claims notice and associateddocuments does not constitute an agreement to pay the claims. Legaldisclaimers needed on all screens. [See Workflow 9 - FIG. 13] 12-D3 Theinvestigation process starts. [See Workflow 13 - FIG. 16] 12-D4 Theclaim is adjusted. 12-D5 The claim payment process is initiated. [SeeWorkflow 14 - FIG. 17] 12-D6 The system acknowledges that a claim hasbeen successfully received, and further information is given to the userregarding how to proceed with the claim. [See workflow 17 - FIG. 18]12-D7 The system notifies the various entities that need to be involvedwith the claim. [See workflow 10 - FIG. 14] 12-D8 The subrogationprocess is initiated once the claim is settled. [See workflow 11 - FIG.15] 12-P2 A reserve is created. 12-P3 If reinsurance exists for specificcertificate, the re-insurers are notified of the claim. [Documents areforwarded electronically.] 12-P4 The claim payment is netted. 12-Q1 Ifreinsurance exists, then reinsurers must be informed of the claim, andthe amount that they will be responsible to pay. 12-A The user clicks onthe “FILE CLAIM” button on the browser.

[0138]FIG. 13 shows a flow diagram for claims notification, withcorresponding definitions as listed in Table 13, below. TABLE 13 9-DlThe data validation process is initiated. 9-O1 The user receives anerror indicating the certificate number entered is incorrect, and theuser is asked to try again. 9-O2 If the data provided by the user is notcomplete, he or she receives a warning message indicating that it willhave to be provided later. This does not stop the user from filing theclaim. 9-O3 The user reviews the claim data for the purpose of signingthe claim. 9-P1 The user enters the certificate number. 9-P2 A claimnumber is assigned by the system. 9-Q1 If the certificate is valid, aclaim document is created; if it is not, the user receives an error.9-Q2 If the data is valid, the user can continue. If it is invalid, theuser must correct the error. 9-Q3 If the data is incomplete, the userreceives a warning message. The user does not need to complete all ofthe data in order to file a claim. 9-Q4 If the user signs the PLA, theprocess continues; otherwise, the user is allowed to update theinformation provided so far. 9-U1 The user enters the loss detailinformation. This includes text information regarding the loss, dates,and so forth.

[0139]FIG. 14 shows a flow diagram for the claims notification systemworkflow, with corresponding definitions as listed in Table 14, below.TABLE 14 10-P2 A Claims representative is assigned to this claim, basedon predetermined criteria. 10-P3 The loss control agent for the regionwhere the loss occurred is contacted urgently. 10-P4 The recoverydepartment is notified of claims that are received, where the timeallowed for recovery is short. 10-P5 The underwriter is notified. [Rulescan be defined to notify the underwriter only in specific cases; e.g.,dollar amounts above $X, commodities, etc.] 10-Q3 If the claim is morethan a predetermined amount, the recovery department needs to benotified. 10-Q4 The shipping document date is checked against a set ofrules, to determine how much time remains for recovery. If it is lessthan a month, the recovery department is contacted. 10-Q2 Is this losshigher than a certain dollar amount? If yes, loss control must beinvolved.

[0140]FIG. 15 shows a flow diagram for recovery/subrogation, withcorresponding definitions as listed in Table 15, below. TABLE 15 11-P1The documents are received by the subrogation department. 11-P10 Thefile is closed, and the reason for closing is specified. 11-P11 If alocal firm is required to handle the recovery, the file is sent to them.11-P2 If there are documents missing, the system red flags them. 11-P3If all documents have been collected, the claim is sent to the carrierwith the hard copy documents. 11-P4 The carrier is usually given acertain amount of time to complete payment before the litigationprocedure is started. 11-P5 If a legal procedure is started, the file issent to the attorney. 11-P6 The litigation procedure starts. 11-P7 Thepayment is received. 11-P8 The collection amount is entered into thesystem. 11-P9 The accounting department receives the paymentnotification. 11-Q1 The system checks to see whether all neededdocuments have been received. 11-Q2 There are three case scenarios. 1.The carrier decides to pay; 2. The carrier does not pay, but the file isclosed, because they are not responsible; and 3. The carrier does notpay, and a legal procedure is started. 11-Q3 see 11-Q2 11-Q4 If thecarrier does not pay, it is possible to forgo the right to sue him,because of the negligible amount of the claim. 11-Q5 If litigation issuccessful, the amount collected needs to be entered into the system. Ifno money is collected, the file is closed. The reason for closing thefile is inputted into the system. 11-Q6 The system determines who musthandle the recovery.

[0141]FIG. 16 shows a flow diagram for investigation/negotiation, withcorresponding definitions as listed in Table 16, below. TABLE 16 13-Q1Claims determines whether to agree to settle. 13-P1 If Claims decidesnot to settle, the client is notified, and the process ends.

[0142]FIG. 17 shows a flow diagram for claim payment, with correspondingdefinitions as listed in Table 17, below. TABLE 17 14-P1 Claim paymentmethod is determined. It can be the same as the method used to collectpremiums, or it may be different. 14-P2 Settle claim. Claim payment canbe made by local insurer entity, or centrally. 14-P3 Send update toaccounting. 14-Q1 Determination is made whether to forward to Recovery.Business rules may include dollar amount (e.g., “send all claims above$X to recovery”), and type of loss. 14-E If no recovery is involved,close the file.

[0143]FIG. 18 shows a flow diagram for claim acknowledgment, withcorresponding definitions as listed in Table 18, below. TABLE 18 17-P1The required documents are determined, based on the transaction data.17-O1 The user receives an acknowledgment that the claim wassuccessfully received, along with a list of the documentation that isnecessary, and the name of a recommended surveyor, if the survey isrequired. 17-O2 See 17-O1 17-Q1 The system determines whether the surveyis required, based on predefined rules. 17-O3 See 17-O1

[0144] In short, an online system for transacting cargo insurancebusiness has been described herein. Moreover, the disclosed methodincludes both the underwriting and the claims processes, in addition tothe quoting and policy issuance processes.

[0145] While the invention has been described by reference to specificembodiments, this was for purposes of illustration only and should notbe construed to limit the scope of the invention. Numerous alternativeembodiments will be apparent to those skilled in the art.

1. A method for an insurer to automate the transaction of cargo insurance business on-line, comprising the steps of: a) in response to a customer request on-line for insuring a cargo shipment, generating a cargo insurance policy quotation on-line, b) upon acceptance of said cargo insurance policy quotation by said customer on-line, generating a bill on-line corresponding to said cargo insurance policy quotation, c) upon acceptance of said bill by said customer on-line, issuing a cargo insurance certificate on-line to said customer, d) determining a reinsurance portion of the value of said cargo insurance certificate automatically, and e) processing on-line a subsequent claim from said customer regarding said cargo shipment.
 2. The method of claim 1 wherein, prior to generating said cargo insurance policy quotation, said customer is pre-qualified, based on said customer's claim and payment history.
 3. The method of claim 2 wherein said generation of said cargo insurance policy quotation is based on pre-loaded data, as well as data inputted by said customer.
 4. The method of claim 3 wherein said cargo insurance policy quotation can be modified on-line by said customer and said insurer interactively.
 5. The method of claim 4 wherein when said bill is not acceptable to said customer, said customer is referred to an underwriter.
 6. The method of claim 5 wherein said bill is paid on-line.
 7. The method of claim 6 wherein said cargo insurance certificate is issued on-line.
 8. The method of claim 7 wherein a risk evaluation of said cargo shipment is made, based on pre-determined limits and restrictions.
 9. The method of claim 8 wherein detail data of said cargo shipment is validated.
 10. The method of claim 9 wherein said reinsurance portion is allocated in accordance with a quota share calculation.
 11. The method of claim 9 wherein said reinsurance portion is allocated in accordance with an excess loss calculation.
 12. The method of claim 9 wherein said subsequent claim from said customer requires an investigation.
 13. The method of claim 9 wherein said subsequent claim from said customer is paid without requiring an investigation.
 14. The method of claim 1 wherein management reports are generated by said insurer.
 15. Storage media comprising a plurality of software routines for an insurer to automate the transaction of cargo insurance business, said plurality of software routines comprising: a) a first software routine for generating a cargo insurance policy quotation in response to a customer request to insure a cargo shipment, b) a second software routine for generating a bill corresponding to said cargo insurance policy quotation upon acceptance of said cargo insurance policy quotation by said customer, c) a third software routine for issuing a cargo insurance certificate to said customer upon acceptance of said bill by said customer, d) a fourth software routine for determining a reinsurance portion of the value of said cargo insurance certificate automatically, and e) a fifth software routine for processing a subsequent claim from said customer regarding said cargo shipment.
 16. The storage media of claim 15 further comprising a sixth software routine for pre-qualifying said customer, based on a claim and payment history of said customer, prior to generating said cargo insurance policy quotation.
 17. The storage media of claim 15 wherein said first software routine generates said cargo insurance policy quotation based on pre-loaded data, as well as data inputted by said customer.
 18. The storage media of claim 17 further comprising a seventh software routine for referring said customer to an underwriter when said bill is not acceptable to said customer.
 19. The storage media of claim 18 further comprising an eighth software routine for processing payment of said bill.
 20. The storage media of claim 19 further comprising a ninth software routine for issuing said cargo insurance certificate.
 21. The storage media of claim 20 further comprising a tenth software routine for making a risk evaluation of said cargo shipment, said risk evaluation based on pre-determined limits and restrictions.
 22. The storage media of claim 21 further comprising an eleventh software routine for validating detail data of said cargo shipment.
 23. The storage media of claim 22 further comprising a twelfth software routine for allocating said reinsurance portion in accordance with a quota share calculation.
 24. The storage media of claim 22 further comprising a thirteenth software routine for allocating said reinsurance portion in accordance with an excess loss calculation.
 25. The storage media of claim 15 further comprising a fourteenth software routine for generating management reports by said insurer. 